News Release: USTR Action Against Thailand: Outrageous, cynical, shameful

For Immediate Release
For More Information, contact Robert Weissman, 202-387-8030

Statement of Robert Weissman, director, Essential Action, in response to USTR’s placement of Thailand on the “priority watch” list in its annual Special 301 Report:

The Office of the U.S. Trade Representative (USTR) has today taken the outrageous, cynical and shameful step of elevating Thailand to its “priority watch” list for allegedly providing insufficient protection to intellectual property.

In its annual Special 301 Report, USTR lists concerns about copyright and trademark violations in Thailand, but the new development — and presumably the one that led to Thailand’s elevation to the “priority watch” list — is Thailand’s issuance of compulsory licenses on three pharmaceutical products.
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USTR knows that Thailand’s actions do not violate its international trade obligations,^1^ and — contrary to claims by Big Pharma and its representatives — the agency does not claim that Thailand is violating is obligations under World Trade Organization rules. Instead, it complains that “the lack of transparency and due process exhibited in Thailand represents a serious concern.” That is a deceptive way of complaining that Thailand issued the compulsory licenses without previously requesting licenses from the patent holders.

This is deeply cynical claim for USTR to make, since it knows that a) under WTO rules, Thailand has no obligation to enter into negotiations for a license before issuing a compulsory license; and b) the United States routinely issues compulsory licenses for government use without prior negotiations with the patent holder.

USTR’s action is outrageous, because the agency’s Special 301 Report claims that “the United States strongly supports the 2001 Doha Declaration on the TRIPS Agreement and Public Health.” The Doha Declaration “affirm[s] that the [TRIPS] Agreement can and should be interpreted and implemented in a manner supportive of WTO members’ right to protect public health and, in particular, to promote access to medicines for all.” When in fact a country seeks to exercise its rights under the WTO — and fulfill its duties under international human rights law — to provide access to important medicines, USTR responds not with the congratulations that are due, but the threats implied by placement on the “priority watch” list.

USTR’s action is shameful, because it undermines public health. By using legal methods to authorize price-lowering generic competition on overpriced AIDS and heart-disease drugs, Thailand has shown the world what it means to place public health over commercial considerations. Thailand has been very clear that the savings it accrues will be used to expand access to important medicines. The message from USTR is that Thailand should back down — but worse, that other countries should not dare to follow Thailand’s example.

USTR’s Special 301 Report is replete with invocations of the importance of innovation. No one concerned about public health denies the importance of innovation — indeed, many of the public health advocates most concerned about access to medicines are the most passionate about spurring medical innovation. Patents, however, are only one tool to promote medical R&D, and a highly inefficient one, measured by the amount of R&D they incentivize as compared to cost to consumers. Thailand has been a leader at the World Health Organization and in other venues in trying to promote global conversations about how to promote medical R&D while also ensuring access to medicines. If USTR was genuinely concerned with this issue, rather than simply representing the interests of Big Pharma, it would applaud Thailand, join the conversation and immediately drop its reprehensible bullying of Thailand, a country with a per capita GDP of roughly one-sixteenth that of the United States.
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^1^ For a detailed examination of this issue, see the recent report from American University’s Washington College of Law’s Program on Information Justice and Intellectual Property.

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Excerpt from the Special 301 Report, available at ustr.gov

Thailand will be elevated to the Priority Watch List in 2007, reflecting a concern that the past year has been characterized by an overall deterioration in the protection and enforcement of IPR in Thailand. The United States appreciates that many Thai law enforcement officials continue to work, amid challenging circumstances, to conduct actions against infringing activity. However, these efforts appear not to have had a measurable effect on piracy and counterfeiting rates, which remain unacceptably high. The weak nature of Thailand=92s legislation governing optical disc media constitutes a particular challenge in addressing the large scale of pirated disc production. Book piracy, cable and signal theft, and entertainment and business software piracy have likewise not been addressed in a meaningful way. Production and distribution of infringing copies of trademarked products, such as apparel and footwear, also remain widespread. With respect to all of these areas, insufficiently deterrent legal penalties contribute to ongoing infringement problems. In addition to these longstanding concerns with deficient IPR protection in Thailand, in late 2006 and early 2007, there were further indications of a weakening of respect for patents, as the Thai Government announced decisions to issue compulsory licenses for several patented pharmaceutical products. While the United States acknowledges a country=92s ability to issue such licenses in accordance with WTO rules, the lack of transparency and due process exhibited in Thailand represents a serious concern. These actions have compounded previously expressed concerns such as delay in the granting of patents and weak protection against unfair commercial use for data generated to obtain marketing approval.